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The festival was started in 1974 by Scott Brown, the Chairman of the Telluride Council for the Arts and Humanities, Bill and Stella Pence, Tom Luddy, and James Card of Eastman-Kodak Film Preserve. It is operated by the National Film Preserve.

In 2007 the Pences retired. Julie Huntsinger and Gary Meyer were hired to run the festival with Tom Luddy. Huntsinger is Executive Director.

In 2010, Telluride Film festival partnered with UCLA TFT. This partnership created FilmLab which was a program that focuses on The art and industry of filmmaking. This program is destined to ten selected filmmaker graduates from UCLA.[1] The partnership was further extended in 2012, the two partners created a mutually curated film program on UCLA's Westwood campus.[2]

Since 1995 a special medallion has also been presented annually, usually to a non-filmmaker who has had a major impact on American or international film culture. Past recipients include Milos Stehlik (founder of Facets Multi-Media), HBO, the French film magazine Positif, Ted Turner, and Janus Films.

After serving guest director in 2001, Salman Rushdie wrote that, "It is extraordinarily exciting, in this age of the triumph of capitalism, to discover an event dedicated not to commerce but to love".[4] Conversely, Susan Sontag, in her 1974 essay "Fascinating Fascism", lamented that, "The purification of Leni Riefenstahl's reputation of its Nazi dross has been gathering momentum for some time, but it has reached some kind of climax this year, with Riefenstahl the guest of honor at a new cinéphile-controlled film festival held in the summer in Colorado…."[5] Kenneth Turan, film critic of the Los Angeles Times, wrote in 2002 that "the hothouse filmocentric universe Telluride creates over a Labor Day weekend has always been more a religion than anything as ordinary as a festival, complete with messianic believers and agnostic scoffers."[6] Jeffrey Ruoff, a film historian at Dartmouth College, noted in 2015 that "Early buzz at Telluride opens the fall season of North American award speculation that climaxes with the Oscars."[7]